Keith Kreps, executive vice president, RDO Equipment Co. (2010 Dealership of the Year), Fargo, N.D., gave the most candid presentation of the day, detailing RDO’s mistakes as it grew at an accelerated pace during its public years (1997-2003). Despite the pain and turmoil of that era (stemming from leaders ill-equipped on the industry and guided by stock pricing motives), those times taught a valuable lesson that the firm can R-O-I today. That is, manageable growth could only come through an internal employee development program that ensured people were prepared for the “RDO way.”
In the 1970s and 1980s, CEO Ron Offutt had built RDO to one of Deere’s first multi-store dealerships on a foundation of strong store managers. A return to that concept, featuring a home-grown development model, was how RDO fixed a tough situation.
Since exiting public ownership 10 years ago, the company has added 16 stores. “But more important,” says Kreps, “we turned down as many opportunities as we pursued — something that would’ve been unheard of in the public days.”
And because of a disciplined training program, every one of those 16 new locations had RDO trained and experienced managers working there from day one, says Kreps. “We knew that processes can be learned, but culture must be instilled and fostered.”
Plans for All Employees
The way RDO developed strong manager bench strength, with people willing to relocate across the country, was a focus on continuous improvement — for every employee. “Management sits with every employee and creates a training plan, from the wash bay guy to the receptionist to the technician nearly at retirement age,” he says. “Everyone has a plan and management is held accountable for executing those plans.” Deere has recognized RDO for spending 2-3 times the dealer average on employee training, he adds.
Plus, RDO makes the effort to set career paths for parts and service people, who represent two-thirds of the firm’s 1,800 employees. “Every quarter, they sit with their manager and discuss where they’re at on their career path, what they need to do to hit the next level and what impact it’ll have on pay,” he says. “They also have conversations about future roles. By having one-on-one conversations about where they want to go in their career, we identify people that — with the right training and the development plan — can go on to great success.”
Taking Control: RDO University
The company has its own “RDO University.” Included is a Management Institute, a program for up to 20 leaders that is similar to an MBA curriculum, including Capstone projects with a company-wide impact. After completing the 2-year program, graduates are ready for a GM or higher position.
In addition, a management trainee program focuses on recent grads. With a mix of classroom training and rotations in the field, Kreps says that once the students complete this 18-month full-time program, they’re ready for a department manager role. In both cases, the participants have agreed in advance to relocate.
Other areas of leadership development include the “Customer Engagement and Initiative,” which involves regional training of every employee on customer expectations, differentiators and “silo busting.” He also described RDO’s learning portal, an online university of hundreds of classes available for every employee, whether it’s a technician taking computer training or forklift safety classes.
People Reviews Count
“Our people-review process has been a huge factor in developing our bench strength,” says Kreps. “Managers take all the information they gathered from the one-on-one conversations, an validate which employees are ready for advancement. Then, we set out on a plan.”
Kreps concluded his panel presentation with an important piece of advice. “Whether you’re a single store or a mega-dealer, don’t grow your organization based on your balance sheet or your manufacturer’s desire or approval for you to grow. Grow your organization when you have the people ready for the challenge and opportunity.”